DESCRIPTION: Prenatal smoking is the most important modifiable risk factor for poor pregnancy outcomes in the United States. Upwards of 20 percent of all low birth weight births are attributable to smoking and the external costs associated with maternal smoking are estimated at between 11.1 and 18.9 billion. In the only published study to date. economists demonstrated that a 10 percent increase in cigarette prices due to an increase in cigarette excise taxes was associated with a 5 percent decline in smoking by pregnant women, an elasticity of-0.5. In 1999, California increased the excise tax on cigarettes by $0.50; New York raised the excise tax by $0.55 in March of this year. The impact of such large taxes increases on prenatal smoking and thus, infant health, is potentially significant. In this study we use data from the Centers for Disease Control's Pregnancy Risk Assessment Monitoring System (PRAMS) to evaluate the effect of cigarette excise taxes on pre-pregnancy, prenatal and postpartum smoking. PRAMS is a random, stratified monthly survey of 100-200 recent mothers selected from birth certificates. By the time the 1999 survey is complete, PRAMS will contain information on over 170,000 births delivered between 1988 and 1999 in 16 states. The primary advantage of PRAMS is the detailed information on smoking before, during and after pregnancy. These data allow us to test a simple model that predicts that smoking is more sensitive to cigarette taxes in the period prior to pregnancy relative to the period during pregnancy. Our model implies that previous work may have underestimated the impact of cigarette taxes on smoking by pregnant women. Another advantage of information about smoking at various points around pregnancy is that we can analyze the determinants of quitting during pregnancy and re-starting after birth. Thus, we can test whether changes in the money price of cigarettes induced by a rise in the cigarette excise tax affects the probability of quitting during pregnancy, an analysis not previously attempted. A third advantage is that the screen for smoking on PRAMS is more sensitive that the screen on birth certificates. Thus, we lessen the potential bias associated with underreporting of smoking during pregnancy. Finally, PRAMS also has more detailed information on the mother than is available on birth certificates, which enables us to more effectively model the demand for smoking by pregnant women than has been previously possible in multi-state analyses.